An engagement policy is required by all firms that invest on behalf of investors in shares traded on a regulated market. In this instance, “shares” only relates to shares or stock in the share capital of any corporate body and any unincorporated body outside the UK.
Responsibilities & Application
Integration of shareholder engagement in investment strategy
The Investment Committee (“IC”) is responsible for the framework and setting the policy. The compliance department are responsible for periodic reviews of the fund managers’ policies and engagement in corporate actions. The investment team are responsible for reviewing compliance reports related to third party managers.
Our business model can be divided into three categories; Advisory investment Management, Discretionary Management and Fund Management. Where we are managing a fund, we utilise the services of an Authorised Corporate Director (“ACD”).
In all categories we will seek to ensure that the investment management team engage appropriately with third parties, including the ACD, which will form part of our annual review. Engagement across our funds will vary depending on the investment process the investment mandate. As a minimum we will vote in the interest of investors on corporate actions and have an appropriate engagement policy. Where are working with an ACD, investors should consult the investment manager’s own Engagement Policy.
Monitoring of Investment Committee
For the funds we are managing, the IC will use reports from the ACD to identify corporate events and direct responses based on the best interest of investors. Most of the assets included in the funds managed directly by A&J are third party collective investment schemes. We expect the third-party fund managers to adhere to the Stewardship code, monitor their underlying fund managers on a regular basis and to have their own voting and engagement policies. If A&J held a direct exposure to a company’s shares, the company’s strategy, financial and non-financial performance and risk, capital structure, corporate governance, and social and environmental impact will be monitored by the IC.
A&J’s compliance department will include in their Compliance Monitoring Plan (“CMP”) a requirement for initial and subsequent risk-based governance due diligence reviews (at least every 3 years) on third party fund managers on behalf of the fund management team. As a part of this review, A&J will assess whether the Stewardship policy of the manager is sufficiently robust and complies with the requirements of the FCA. A&J will also review the company’s engagement in corporate actions. All reports will be made available to the IC, which holds the accountability for maintaining relationships and dialogue with the fund managers.
The A&J Compliance team may also ask for MI demonstrating voting patterns and any decision- making processes from A&J’s fund management team.
Exercise of Voting & Other Rights
Most of the assets included in the funds managed directly by A&J are third party collective investment schemes. A&J receive notifications of votes directly as Agent, or via the ACD who is the registered shareholder. Notifications are forwarded to the IC who make a decision.
We will always act in accordance with our engagement policy and in the best interest of investors. The ACD will not make decisions on behalf of investors.
Cooperation with other Shareholders
Where we deem it appropriate and effective, we may engage collectively with other investors where it may be beneficial. Where we manage multiple collective investment schemes and management is split between more than one party, it may be beneficial or required that we work collaboratively. Collaboration will be on a case-by-case basis and co-ordinated by the IC.
The funds managed by A&J have fund of funds structures and exposures to underlying investments companies are held via investments in collective investment schemes. Under normal circumstances, the ACD is not expected to communicate with our stakeholders directly, unless they deem it appropriate and necessary.
We will establish lines of communication with the ACD and fund managers. Communication with our stakeholders will be determined by our engagement policy.
Conflicts of Interest
The framework for the identification and prevention (or management) of conflicts of interest is clearly set out in our Conflicts of Interest policy. Compliance maintains the conflicts of interest register and corporate governance requirements ensure that existing conflicts are discussed at Board and Management Committee meetings and all new conflicts are be disclosed at all formal committees.
This policy will be reviewed at on at least an annual basis and will be approved by the Compliance Team.
The annual disclosure of how the policy has been implemented will include:
• A general description of voting behaviour;
• An explanation of the most significant votes;
• The use of any proxy advisers;
• How votes have been cast in the general meetings of companies in which the schemes hold shares (where these votes are significant, considering the subject matter of the vote or the size of holding).
The annual disclosure will be generated by the IC and, once approved by Compliance, will be published on www.ajwealth-management.com .
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A&J Wealth Management Ltd
© 2023 A&J WEALTH MANAGEMENT LTD A&J Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. Financial Services Register, no 428590, at www.fca.org.uk/register Registered in England, Company no: 5105933. Registered Head Office: Sawfords, Bigfrith Lane, Cookham Dean, Maidenhead, Berkshire SL6 9PH